Germany to delay vote on permanent eurozone rescue fund

The German parliament expects to postpone its vote on a permanent rescue fund for stricken eurozone members to early next year due to continued debate in Brussels, officials said on Friday.

Negotiations on the European Stability Mechanism (ESM), a permanent bailout fund expected to replace an existing scheme in mid-2013, are ongoing which has pushed back Berlin's timetable, government spokesman Steffen Seibert said.

Originally, the German cabinet was to approve the necessary draft laws for Berlin's participation in the ESM next week with parliament to vote on the legislation by the end of the year.

Now the cabinet is not likely to receive the bill until mid-October, with deputies expected to vote in the first quarter of 2012, said the spokeswoman for the parliamentary group of Chancellor Angela Merkel's Christian Democrats.

Because the ESM is not expected to go into effect for another two years, Seibert said the delay did not pose a problem. "We still have a lot of time between now and then," he told a regular press briefing.

The Bundestag lower house is due to vote on September 29 on German participation in an expansion of the current EU rescue fund, the EFSF, agreed by European leaders in July.

However Merkel is facing a possible backbench revolt within her own fractious coalition over the draft legislation and may have rely on the support of the opposition to see it passed.